The success of a simple network in developing an innovative energy-efficient technology

Abstract

Innovative energy-efficient technologies are likely to make an important contribution to the limitation of CO2 emissions in industrial sectors in the longer term. In this article, we explore the balance of 'internal' and 'external' factors in driving the RandD development of a successfully introduced energy-efficient technology in order to improve our understanding of the effect of government intervention in stimulating the development of such technologies. In the case of shoe press technology, internal factors were decisive for Beloit's success in bringing a radical new press design to the market in 1980. However, Beloit's success was grounded in external factors; they had a thorough knowledge of the needs of paper manufacturers - reducing the cost per ton by improving machine speed or reducing capital intensity; and they were also an appreciated partner in paper machine business. During the diffusion of the technology, the technology's market success, an external factor, stimulated ongoing improvements in shoe press technology. Some policy lessons regarding the possibilities for government to stimulate the development of energy-efficient technologies can be drawn: (a) when the development of a technology (that amongst others positively impacts energy use) has a strong momentum, government intervention is unnecessary; (b) government should acknowledge (and cultivate) the decisive role 'champions' or devoted actors can play; and (c) government should try to anchor energy-efficiency as a more important criteria for R&D activities among actors that can make a difference in the development technologies for mature industries.